Will you be self-employed from the shadows at the suggestion of Putin

21.09.2016

Self-employed people should be exempt from taxes. This statement was made by Vladimir Putin. We are talking about fiscal relief “for two years”, which, according to the President, were discussed at party forums and platforms front. To evaluate the President’s proposal “MK” asked the expert.

photo: Mikhail Kovalev

According to the Ministry of economic development, now in Russia there are about 16 million self-employed. These citizens are not employed and are not unemployed. But they are not registered as individual entrepreneurs. In particular, these include seamstresses, manicurists, Tutors and so on.

According to Putin, to withdraw from the “shadow” self-employed hinder bureaucratic obstacles, unplanned inspections and fees in the business. “I believe that self-employed citizens need to offer a clear and convenient tool for interaction with the state”, — said the President.

Read the story: self-employed Russians will soon be exempt from tax: so Putin ordered

As said the head of state also need to eliminate any possibility of recognition of activities of self-employed illegal business.

“This measure aims to contribute to the self-employed from the “shadow”. However, this is unlikely to solve the problem, because the incentives needs to be much more serious to people would legally register their income. Such a stimulus could become a reliable pension system. But given the “freezing” of the funded part of pensions very few people decide to formalize their business officially only for the dubious chance to get a normal level of pension wealth”.

“A proposal to exempt the self-employed taxes can be viewed from two sides. First — in relation to notaries and lawyers. In this perspective, the initiative actually does not make sense, as today the representatives of these professions usually are not experiencing financial difficulties. The second to individual entrepreneurs. In this direction the initiative is very correct. Self-employment is the first step towards building a large business and, therefore, create jobs. In a capitalist economy, big business always grows from small, to many examples: Dell, FaceBook, Apple. The creation of jobs is very important for the state, both from the point of view of the welfare of the nation and socio-demographic aspects. His proposal Putin signals that the government is ready to support those who act in the right country direction. This uses the stimulating function of taxes.”